tv Worldwide Exchange CNBC January 24, 2013 4:00am-6:00am EST
generally and we know that the youth unemployment is well over 50%. so those will be the concerns that remain. let's bring you madam tosen. nice to see you. >> thanks for something me. >> there's a sense that europe is down, but we've got the sector spanish numbers that suggest big problems. >> well, turning the corner is i think the wrong image. i think the ecb's action have put a floor under things and cut off the tail risk. so for your investor types, they've seen reduction in risk premium and that's given gains in equity. the economy is going to be lousy for the next two years. >> so we're running this online poll which is asking this question, this lack of current crisis that we have, is that because there has been real progress or is it century? >> no. i think it's a product. the ecb has stepped up and
merkel and others committed to some day doing the kinds of physical transfers of banking units they need. and there has been some real progress even off that cleanup. but none of that is going to offset the unemployment numbers, barred from that the lack of investment, the constraint on demand from the austerity programs, the feedback in europe. so, again, it is real progress, but that's not going translate to growth anytime soon. >> when you say not going to translate into growth, what is the outlook? >> to me, what i've been saying for a few months is that europe's past is bounded from below and from above. we've ruled out the worst of the crisis, thank god. but the austerity, unemployment and continued downward wage pressures put a tight ceiling on growth. so germany is growing less than 11%. france is toying with recession. spain and italy are going to be in actual recession and i think the imf's latest update is much closer to reality. i still think they -- the only
upside surprise i can see happening is spain. but given the unemployment, it's only temporary. >> that's europe. now, there's a big discussion ing in the uk with regard to europe. tomorrow, we're going to get the first glimpse at fourth quarter gdp. having looked through the data that we've seen, are we expecting an exit close to that? >> i fear so. i think it's just the economy is very weak. but what i'd like to focus on is what's going to happen to investments in the next couple of years. if they're going ahead with the spread of a new referendum, people used to talk about the uncertainty hanging over europe or because of the fiscal cliff. this is going to be a real dagger in any british recovery. >> it's interesting, i spoke to lord brown who is now with str consulting. he told me -- and i've asked him to send me this survey. he told me last night that they have a survey of international
companies who tell me they think it would be fine if britain was in a view. as long as they had the rule of law with the rest of the world, they would be happy with that. >> i talked to the planning people and the ceos of a lot of multi nationals. none of them that i speak with are saying that. the uk should never become hong kong or singapore not because they aren't great things, but because they're tiny countries. of course we'll have to stick with rule of law. of course we'll have to play to their financial strengths. but that's not going to be enough if they pull themselves out of their most important political and economic relationship and if they seem to be america's wrij into europe. >> what -- the u.s. feels very strongly, it's extraordinarily strong remarks, unusual. why was that? is it because actually they view the uk as the biggest
proopponent of trying to get a single market to work and if europe is not in it, they're more competitive? >> i think they view the uk's voice as more liberal and more broadly european affairs is an important one and it's a question of the uk is in many ways the u.s.'s most important national security ally. and pulling out politically interferes with that. but it is mostly what you said. they feel rightly, in my opinion, there's a lot of economic insanity in europe. >> so the split is uk is no longer of an interest, it's more ott a threat national as opposed to -- you know, you'll no longer be any used to us? >> well, those are contradictory. if the uk gets to cherry pick the french and german leader ves appropriately dismissed some of cameron's fantasies. if the uk gets the cherry pick
and still has influence in discussions, that would be surprising. if on the other hand they are out, then they are of less use frankly to the u.s. >> adam, good to see you for now. that you can very much. >> ross, thanks for that. we are seeing signs that china's economy is rebounding. overnight, china's manufacturing pmi hit a two-year high of just under 52 in january. the subindexes output and new orders have all improvement. they're hovering above 50 which is a dividing line between contraction and expansion. there's no indication as to whether this will last, though. let's see what markets mistake of it. li sixuan is keeping an eye on markets from singapore. hi, sixuan. >> hi. thank you, kelly. it's a pretty mixed picture over here for asian markets. in china, the shanghai composite hit an eight-month high.
many recent outperformers such as environmental stocks were under pressure, but the defense sector bounucked the downward trend. the mobile shares rallied about 657% after the pcmaker said its smartphone business in china has turned a profit much faster than expected. it's seeing strong growth in other emerging markets. in japan, the nikkei gained near 1% aen though japan's trade deficit has soared to a new level. elsewhere, south korea's kospi lost about 0.8% while its gdp data came in slightly below expectations. apple suppliers -- after the disappointing forecast. australia's asx 200 is up at a fresh 21-month high.
india's sensex is still in action, now trading lower by 0.2%. kelly. >> sixuan, thank you so much. we will check back in with you in a little bit. first we get to get an idea how markets are trading in europe. broadly speaking, we're down with 0.1% on the stoxx europe 600. that i a look at what is happening across the major bourses as investors digest the pmi data we've been talking about. stronger in china, stronger in germany, weaker in france and the cac 40 mildly off. ibex 35 is up 0.2%. the xetra dax is barely higher even though its pmi data showed manufacturing and sector segments at all-time year highs. the ftse 100 is flitting with 62 multi year highs, today adding
0.2%. it often has some of the strongest individual stocks on the back of earnings. we'll get into that in a little bit. first, though, what's happening across bond space? the lack of discussion is probably the most telling thing that we've been seeing here. a rally almost across the board today including the periphery and the course. this is an interesting move. italy and spain are coming in down to 4.16% and just over 5% respectively after touching over 5.2%. spain continues to rally. bunds are moving a bit lower today. forex, the euro/dollar is one to watch, up 0.1% today. 1.3330. people are talking about how the ltr payment amounts to tightening. the question then becomes for some of the weaker economies whether it's too strong. dollar/yen moving up today. the yen is weakening by about 0.1%. fitch is saying british banks
could need more capital. this has certainly been a theme. something, in fact, out in davos. ross, maria and everyone has been asking banks do they play to raise more capital? ross, what do they have to say about that? >> well, look, there's a lot of folks. what was interesting is when we spoke to the barclay's ceo mr. jenkins this morning said the whole industry when they were growing revenues didn't have to worry too much about costs. now they have to focus on the cost side of the business, which we know they're going to have a transformal plan and that's what they're going to be doing, as well. . capital requirements, how much capital is right when you're still going through periods of contracting growth because, obviously, the higher capital you have, there is less money to lend. so we'll be talking about that. but right now, we want to switch gears slightly and let's introduce our next guest. first on cnbc, marian deckers, the ceo of bayern. nice to see you.
>> nice to see you. >> thanks for joining us. i was looking at your stock price from last year. up 46% driven a lot by health care. the head of your health care unit this morning, mr. reinhart, is off to nevada. how much of a dampener is that? >> he's an excellent leader. he's basically going back to his old company where he had been for 30 years before he joins bayer two years ago. we're going to miss him, but it's an understandable move, i think. we are very well positioned in health care. we have a very good pharma pipeline that's picking up a lot of sales momentum. hopefully in the other areas, consumer health, we're very strong. so i do not worry about our health care business, but it's unfortunate that -- >> is there anyone scheduled to replace him? >> no.
we have an interim replacement, somebody who has been with the company a long time, and until we find a good solution over time. >> you are going to get more competition this year. pfizer is coming out with a blood thinning drug. you're going to have to fight for your market share. >> yeah. well, that's the name of the game, right? we are in competition. we have a very good product. we've introduced about a year ago, so we have a little bit of a -- an early start compared to pfizer. but this is a very big area to avoid blood clocks and avoid stroke. it's a very, very big area because the medicine that has been used has been used for 40, 50 years. it's not optimum for patients. so this is a brand new opportunity in the market that, you know, more than just one competitor will benefit from. >> and it's got increasingly hard for some countries to develop big enough drugs to
support the size of the businesses. and we were talking to merck's ceo about this, as well. there's pressure, of course, and governments are bringing in pressure to bring drug price down. where is the balance between the two? because, you know, we want cheaper drugs that provide for patients, but what does that do for you? >> you want, of course, affo affordable drugs, but on the other hand, we need new, good drugs because there is so much on the medical need. there are still so many diseases that are not supposedly treated. plus, science its made so much progress even in the last decade that there is an opportunity to come out with better drugs. and the simple message is the pharmaceutical industry understands that there has to be a certain control on the costs that cannot bring out of control. but on the other side, if you want to continue to have new
drugs, we need to get, you know, rewarded for innovation. and this is a dilemma and not really all that is well understood by government. >> drought, very low yield from around the world. >> if value is good news, it's driving people to look for things that are going to help the world. what's the outlook for that? >> well, you know, we can help with our products, with our crop protection products help farmers to improve the yields on their crops. of course, when agricultural commodity prices are high, then the farmers get even more rewarded for extra yield and is more willing to invest in those extra yields. so it had two very, very good years when we expect, actually, the 2013 also to be a good year because, you know, of this
phenomenon. >> your views well on where we are. we have seen mixed data this morning, pmi a little higher. still in contraction mode. spanish employment still going high. how much progress do you think we really made in european policy making? there's no sense of a crisis at the moment. maybe down to ecb action. i'm wonder fg that's a temporary shield, when we've actually -- >> i actually do have a sense that things are a little bit more stable, a little bit more calm than, say, exactly a year ago when we were here. and that helps because in the end, the ceos, some sense of stability that you can, you know, start making assessments again. the ceos are relatively nervous and just go and spend it and invest. and the more stability we can get, even for the real progress
as we know is visible. but we know we're on the right track to build confidence and then the investments will come. >> all right. thanks for joining us on cnbc. it's always a pleasure. we'll take a short break. still to come from our coverage here, we'll be joined by maria, john chambers, as well. we'll see what's happened to apple overnight. he always says you have to be fast moving in the mobile world.
those flashes, kelly was talk you canning about them from fitch that they can well need more capital. first of all, we have mr. corbett and mr. jenkins, mr. corbett still talking about the transformation still required at citi. >> the good news was we looked at the fundamental drivers of the business, our operating revenue expenses, our net cost to credit, all things headed in the right direction from a capital perspective. the capital standards are going
up. it's an industry we're going to be forced to carry more capital than we have historically. we want to lower leverage rates than we have historically. and i think the industry examine in particular the u.s. banks are moving towards that quite quickly. and if you look back 30 years, the three big things have driven our industry. you're going to see a reversal of those trends. more regulation, more nationalism and an economic environment that people are not totally pessimistic, but i think they expect to see more going forward. >> an thonenny jenkins from barclay's. good to see you. thanks for joining us. pick up with barclay's. what are the expectations of what they're going to do with that transformation and job
cuts? but he clearly made the point. he said when we had strong revenue growth, the banking system as a whole didn't have to worry about cost. now we've got the right costs for the new environment we're in. and is this a cross to the board picture? >> definitely. banking ultimately is such for the underlying economy. so i think it doesn't take an economy to tell us that the next couple of years is going to be choppy and not the growth we've had for the last 20 years. banking has to go back to basics. fist, think about your revenue and cost base. here on the cost base, huge improvements. they've always been unmanaged because the revenue is growing so, you know, clearly matched to pay people twice as much as we have to. today, people working from i.t. to legal to front office staff to traders, everyone in my view is clearly overbased. given the number of job opportunities that are there, i
think banks cap capitalization. they should tell management, cut your costs. and i am sure people would be very happy. >> we're going to see a lot more come on the compensation levels. how should they measure compensation? particularly in banking? >> certainly. so first of all, up to now in investment banking, we're seeing the number of head count reduced and the average compensation stay the same. so my view is basically management tried to preserve. so the best guys stay in, we keep underperforming, but ultimately compensation hasn't come down. to me, the second face has to be compensation in absolute terms perhaps has to go down. the way you ashrine compensation with management is very simple. if we do a one-year business, mining in a year's time you give the money back and i paid profits. it's action close, normal rates,
deposit holder. i should only be paid in 20 years' time when i see whether the transaction is closed or not. so the fact that the banking has long duration, combination should be tied when the risks are totally off for shareholders, bondholder and deposit hoe holder. hence, i strongly support the bank of england's production of compensation up to ten years. the average balance sheet of an institution is between five and six. i think it's very sad to look at margins. so people shouldn't be paid on the business they put on for five to ten years. >> you speak to a lot of bank ceos. how do they feel about that? >> they don't like it. but the reality is, it's actually a regulator job and a politician job. let's put it this way. in your business in cnbc, if today you sell some ads, the company made some cash and it's sad what shareholders and employees get paid. tomorrow, you're not going to make any losses for whatever we
do, me and you, today. today, that's not the case. in reality, you give money to me and if i run away with the cash what's going to happen is there will be a huge loss. in reality, nothing has happened. >> we haven't booked a profit. what about this fitch idea that bnks are going to need more capital? >> i think the rating agency i am not in favor of for the simple reason basically it has been created by regulators. regulators didn't want to take the risk so they upped the case to rating agency. so now rating agency basically has a monopoly. they can say anything they want. they cannot be sued. they tend to employ people who are not the best thinkers simply because economically they can't. so first of all, i wouldn't follow rating agency as, you know, the rule of law. >> do they need more capital? >> in my view, they don't. they probably need slightly more contingent capital meaning the
buffer above equity. i would add more buffer for the reason that eats such a high component of the gdp, but you need the buffer. and this buffer is filled with hybrids. so basically, anything which is above equities, but in case, let's say, you know, things could get converted into equity, but remains best as time goes on. >> you're analyzing banks across the place. who is in the strongest position right now from an investment point of view, do you think? >> investments being as a shareholder or -- >> investing as a shareholder. >> i have this theme globally which is today the national champion in each of the key large markets is winning. so in mir view in the u.s., the citi, jpmorgans are we knowing. who is we knowing in asia and the barclay's, the santander.
so i have this view that overall as business is not growing, what is going to happen is the way the cake has been redistributed is changing. >> and you want to capital the little guys because they find it harder and harder. you're not going to get into a little unknown bank. people decided to give money. and guess what? that wasn't a bright idea. so you would rather keep barclay's. >> we forget lessons overturn.
>> you're not going to put your money in a frozen fish market. >> thank you very much, indeed. we'll take a short break. still to come, spanish unemployment creeping up to another record high, now rate of 26%. we'll get more on that with guy rider who is director general of the ilo. mr. kent, the ceo and president of coca-cola will be joining us on today's ram. mr. john chambers, the chairman and ceo of cisco is standing by, as well. it's a good show today. >> ross, fascinating point there from your guest. >> even i think itself auto good show. >> and i know your expectations are so high, but i love who to hear him point, look, if you're tot going to get paid for 20 years, defer compensation for 20 years. for those of us just joining us, here is a reminder of your headlines. barclay's ceo anthony jen yings
tells cnbc the bank is making headway in its transformation. he admits the bank has made mistakes in the past. >> the industry and barclay's got it wrong on occasion. i think we were too aggressive, too short-term focused and we were too self-serving. and chinese factory orders hits a two-year high. apple reported disappointing earnings results raising concerns about its product. and the jobless rate now in frank has dropped to 26%. the french business activity strength more than expected while germany, yes, it continues to steam ahead.
last night, the big news, of course, apple's first quarter profits were relatively flat. revenues were shy of estimates. the company lagged iphones which analysts had projected. apple expects second quarter revenues of 41 billion to 343 billion, below consensus estimates. in a break with tradition, apple will provide a range of revenue and margin instead of a single number. lots of focus on the company's guidance provisions. shares are down 10% in after hours trade, the biggest intraday drop since may 2010. just about 8% in frankfurt trade today. they are clawing back a little bit. down 28% for this company. apple suppliers also feeling the effects, not surprisingly down 3%, the qualcomm down by 1%. lg display down, too.
now back out to davos, ross westgate is joined by maria bartiromo. hi, maria. >> good to see you. thanks for having me. >> and that's a good place to start for our next guest. >> it really is. technology is where we want to focus right now on the heels of apple. john, good to have you on the program. >> maria, it's a pleasure once again. >> thanks for joining us. we're watching the sentiment around apple changing. >> what is amazing, our industry is very spartan. if you don't reinvent yourself every two to five years, you get left behind. apple is behind in the long run. tim is a very good leader.
the key issue in our industry, i like what they're doing long-term. but this goes down every 20 years. leaders in our industry, they can't adjust to the market transition gets left behind. >> a lot of focus on how they're going to change the way they guide, right? >> well, that's a very well loaded question. but i think what it speaks to is when we were going that 30%, 40%, 50% during the 90s, we did levels set very low. as it might be in the mid single digits just for purposes of discussion, you have to be pretty accurate on your forecast because you can't read levels below it. one of the issues in davos is about risk taking.
and i would argue in our industry, if you're not taking what's left behind, that goes down remarkably well. >> your network in social media mobility, all of the major trends right now in telling. where does the growth come from in a coming year? >> if you talk technologywise, we're growing 60% in there, an area that many people said we couldn't enter in the market and make profits on. we're up to 20% market share. big data big time. big data isn't about trenching numbers in the data center. it's about intelligence throughout the whole network, connecting to every device. today, in 2000, there's only like 200 million devices. by 2020, there will be 50 billion. and how do you use this connectivity to change it? we call tilt internet of everything. and it gives us the chance to move from a communications company to the number one i.t.
company. mobility grew for us, 38% in fact last quarter. selling to innovation to our customers and becoming their top partner. >> is that ever going to change? >> well, i think you will see i.t. budgets go up over time. the growth, while it is improving in most parts of the world, it's still rel ofly heightened numbers. the top ministries, etcetera, all that understands the future. how do you stand in a way to get the bess off the back? it's predicted that i.t. will lead the world out of here.
i think that -- >> so right now, john, you've got a great vantage to see how we're doing. europe, is it still troubled? >> yes, it is. if you look in europe, the great news is when you talk to our counterpart hes here, most are begin to go level out. it's leveled out, but the trims are right. the customers have become more optimistic. northern europe, southern europe, uk and yesterday. northern europe is doing much better. the americas, i'm more optimistic. i would watch what our enterprise customers do over the next quarter or two and what our commercial customers do. most people have the u.s. growing up to 2% give on or take half a point. global gdp, give or take a point. asia, it's solid. a lot of people are worried about china coming in for a
rough landing. >> we have a guest coming on later who they they might be overheati overheating again. >> i know most of the government leaders. we do home and away programs with government and business leaders. they are really good. welcome in for a soft landing. when you look at governments around the world and we're very close to canada, easy places to do business. but they look at our technology can achieve their goals in terms of standard living, job creation, global competitiveness. >> but when you talk to the enterprise players, we're all waiting for some of these corporates to put money to work. sitting on 3.6 trillion in cash on balance sheets and all you're seeing them allocate that money. what about budgets in terms of
i.t. budgets? >> i think i.t. budgets will be tight. if they see reasons to improve their top like and bottom line, they'll move. shares will probably go up. looking to work on a global basis, we have declared more companies in the past 12 months than we did in the two years before that. >> and israel, right? >> more than 75 million. it is a software company and a mobile market and a data center with recurring revenues. exactly what you want and high margins. we bought ndf, some types of opportunities. but both of those are outside the u.s. so we're assuming that the tax laws are not going to change. we're basically going to put our money to work in places like canada, the uk, israel, russia and asia where they're going to get a return and where we want it. >> that is a change and that starts spreading out, does that mean the rate of pick up in
dividend payments and shares -- >> no, we committed to our shareholders 50% of our cash flow we will pay back on them, either in the form of dividends or share buybacks. but i think the key things to take away from davos is we're becoming the innovative leader and many of the concepts appear to be paying out very well for us. >> so what makes more sense for you right now, dividends, increase or a buyback? >> we're going to poll our shareholders. we've committed to giving you 50% back. >> thank you for join onning the program. >> we so appreciate it. >> thank you.
now, look, we were going to talk about this but while we've got maria here, derek jeter, right? >> yes. he came to see me at dinner last night. i was talking about when i threw the fist pitch at yankee stadium. he was there. it was an exciting moment. >> yeah. and it was a great game. everybody enjoyed him, apart from the one dodgers fan. >> there was also a red sox fan at the table. and i was like, wow, you know? they were really getting into it. but i would bet on the yankee necessary 2013. that's just me. >> kelly, do you want to bet on the yankees for 2013? >> i'll go with maria on this one. i hear you guys got a little plug of grass from the 3,000 hit, i understand? >> yeah. they were giving away little wall mounts with dirt from the 3000 pitch. >> i threw the first pitch. it was a couple of years ago. >> i don't need this dirt.
come on. it's bigger and better. >> i have to tell you, i was looking at this ring. i didn't know what i was looking at. i was trying to explain to him the rules of cricket, right? >> yeah. good luck with that one. >> that wasn't going anywhere, i can tell you. we'll talk more about that in a few minutes. we'll get back to other serious masters. unloimt in sxan keeps going up. we'll get the views of guy ryder, director general of the ilo. what are you doing? nothing. are you stealing our daughter's school supplies and taking them to work? no, i was just looking for my stapler and my... this thing. i save money by using fedex ground and buy my own supplies. that's a great idea. i'm going to go... we got clients in today.
welcome back to "worldwide exchange." let's give you a quick market update. we are seeing bourses trading for the most part higher despite apple disappointing markets last night. the ftse is up 0.2%. slightly higher for the xetra dax. the cac 40, up 0.3% despite showing serious weakness in the serious sector. i wanted to show you a couple of individual names driving the markets this morning. easy jet, it's up 3.6% on better earnings. national bank of greece rebounding, as well.
if we look tow to the flip side and show you some of the companies weighing on the index this morning, opec is greece's biggest gambling company. partly state-owned. logitech reported disappointing third quarter earnings. it's stung by the weak pc market. icap, the world's biggest broker dealer down more than 5%. the ft reporting that it's being investigated over libor rigging. so a name we haven't necessarily seen being brought into that case. unemployment hit its highest levels since the fourth quarter of 2012. almost 6 of million people in
spain are in and out without work. now, speaking of job cuts, unicredit is to cut around the south in germany as part of a plan to shed according to reuters. they've l announced 6 of,000 jobs worldwide. the german bank is looking to slash costs and said it would negotiate with labor unions starting in february to decide on the exact number of layoffs in germany. ross, we know that job cuts have been such an area of focus, an area w the been a lot of political pressure. when you see some of those numbers this morning, youth unemployment may be upwards of almost 50% and there are families that have no one marked for identification. a real crisis. >> a huge crisis. and, of course, you're in danger of damging an entire generation,
as well. jobs, as ever, a really big focus of discussion here in davos. but the companies are saying they ted still need to be competitive. >> there is no scarcity. so that is good news for our industry. we need to see less unemployment. >> part of it is reduction, but another part is how we're going to improve production, how we're going to bring more work. it's a whole that you want to deal with. >> when i became chief executive, i laid out the strategic -- for the group which i call the transform program.
>> they're figuring out the ones we were very happy with. i'll be talking in february 12th in detail about all of this. obviously, we've begun the work in transport and today is some of that work. >> let's talk to some of the guests we've already heard from in our coverage. guy ryder, director general of the ilo. thanks for joining us. >> pleasure. >> we talked about how there's sentiment around europe in terms of the market and the effect of the ecb. you've just given the unemployment numbers for spain. no turn around at all there. what are the long-term impacts that we're seeing? >> the impacts, as you've been hearing, we have levels of unemployment in spain which i think are very difficult for any of us to imagine the social effects of. what he think is quite worrying is i think the move here in davos is that the financial
situation in europe, it's turning the corner. there's a good deal of optimism about that. i think we have to keep very much in mind is the situation on labor markets is getting worse. globally, we estimate that we added over 4 million to the unemployment cues around the world in 2012. and the bad news is, for 2013, it's even worse. 5 million more. so i think we have to be very, very careful that we don't focus exclusively on the financial aspects, although getting that right is absolutely vital. we need also i think now more than ever to pay greater attention to the jobs situation. >> and you look at the big growth industries. grew out too much. you heard the r cancer eo come in and saying, look, we have to trim our cost base, we have to make the clock fit the environment we're in. so that's an industry that's only going to be shedding more
jobs. where are the industries that will be creating them? >> i understand ceos. they live in the new world, they live in the market conditions that circumstances are generating. we need to get growth going. we'll get the public finances back in order and then we will turn to job and growth. i don't think we can wait that long. two issues, one is the situation of young workers. we've heard in spain, you're more likely to be out of a job than in a job. and this notion of a lost generation, it sounds like a cliche. it's a reality because everything shows that if at the beginning of your professional career you're out of the jobs market six months to a year, you have a difficult time getting
back in again. that is the situation that one-third of the unemployment in europe face. >> why do you think they've been comfortable with the price? >> the question i most free throwly get asked about youth unemployment, if it's going to create social instability, are we going to see a revolution crossing the mediterranean? and my answer to that is if you have 55%, 65% of young people out of work in your country, you have a social problem, you have a social stability threat. let's not wait to get to the edge of the abyss in those terms to act. the real trigger for action should be that there's a massive waste of economic resources and human rights. for the moment to move actually was yet yesterday. but let's do it now. >> we saw composite pmi today. there's one company that stood out, france. much weaker than expected. carlos gohn was speaking to us
earlier talking about the job cuts they're trying to come in. he said, look, there's a reduction, but another point is about improving production doing more work for france. what kind of particular problems does france have? it seems like it's competitiveness is declining at a much quicker rate. >> but i think the new french government recognizes there's an issue around competitiveness. thief very difficult negotiations took place. i think they did something very good. it looked at the competitive agenda. france does need to step up its act there. we've looked at what they call tight security issues. that is to say, to get out of a situation or move away from an issue where six out of every seven jobs or labor contracts signed in france today are for fixtureation. sometimes one per day. so i think we have to look at the way people are operating in
job markets. you have to create situations where people's situations in job markets are relatively clear. the auto industry creates particular problems in france, but not just in france. >> and i want to finish with seeing if you can answer the big quandary in unemployment. tomorrow we're going to get the first print of uk gdp. adam poser is saying it will probably be a negative print. the sharp difference between the growth numbers and your ilo measure of wider unemployment and your unemployment rates look extraordinarily strong. gis your wroen for the disconnect. >> it's a tricky story. i think part of the answer, if you step away from the statistical dinnerses and the way of measuring that may exist is i think in the uk you've got a major move into part-time unemployment, which in some terms you could look at this
underemployment. so the headlines open unemployment figures have to be, i think, second to that part-time. there's more conflicts, movements going on in labor markets, but there are issues there. and the uk is hoping the industry will come back. 15 must know jobs, it's great. >> only two automobile industry necessary europe actually improved as of last year. the uk is one of them. >> that's great. you look at the downside of all of this and it links to the competitiveness, just over 4,000 jobs go in belgium, and 1600 are picked up of those in spain, you've got the real danger that the competitiveness efforts being imposed or undertaken in space could be very difficult. >> good to talk to you. thanks very much indeed, for that.
hello and welcome to this very special edition of "worldwide exchange." i'm kelly evans in loppendon. >> and i'm ross westgate in davos where this morning, the new barclay's ceo told us exclusively the banks need to focus on cuts, on costs, and they're focusing on this area, but they have made mistakes in the past. and we've seen china pmi at a
two-year high for the first month of this year. but we have a guest coming up who thinks the focus will soon be switching not from the lack of growth but perhaps to too much. >> now, apple, meanwhile, losing its shine. shares down 10% in after hours trade after the company reports disappointing first quarter werings, ramping up concerns about demand for its products. and eurozone pmis and french business activity shrinks more than expected while germany continues to stream ahead. now, ross westgate is in davos. i'm here in london. ross, it's a little bit warmer where i am today. >> yeah. well, it's starting to warm up here, as well. we've got a lot of great people to talk to. and look, there's a lot of great gossip yesterday, as well, going on. we talked to -- maria is going to join us. we will talk about the dinner we had last night.
lloyd blankfine and a little bit more hair around his chin, which i -- you know, people are trying to say does that signify something? but let's bring maria in on this. i think it's just because he didn't bother to shave over christmas, right? >> well, he tells me that he has had a beard for many, many years and he hasn't had one for the last five years or something, and so he just went back to the man he was. >> right. >> and they've been on twitter this morning, we're trying to work out whether there's a deep significance in that. i think it was just the fact that he couldn't be bothered to share. >> it could be. but i can't really discuss the gossip at the dinner. it was off the record. >> but it is a fact that he has -- that is a fact that it's out there. so i don't think we're giving anything away by discussing the fact that he has a beard. i don't think folks read anything into it. we're safe with that, right? >> yeah. we're save with that.
i will share one thing with the derek jeter conversation. he likes music a lot and he likes to deejay around. >> spinning the records, deejay. there's my one piece of gossip. >> and we're going to talk china and u.s. housing in a bit, kelly. >> i love the go the gossip hiring. derek jeter, i'm hiring for my wedding whenever that happens. >> cool. >> china's manufacturing pmi is at a two-year high of 51.9 in january. the subindexes for output, new orders for unemployment have improved to above 50. there's a dividing line between contraction and expansion. the flash showed demand for chinese exports. but the real question is whether this recent momentum will last. let's get out to davos to talk to a couple of people who might have some idea.
>> absolutely. joining us now is the former advisers of people, bank of china, pboc, and robert shiller is with us, as well. let's kick off with you, first of all. china pmi, as kelly said, you think now the focus is we've been focused on lack of heating. >> not yet for the moment. now all the local new governments, it will run conditions, development before us. and it could, you know, cast some kind of overheated investment demand. so that turns the growth set into the zone of 9% to 10%. whenever china has a 9% growth, we have inflation. whenever over 10% took up double
digits, you've got deflation and asset bubbles. so 10% of growth is overheating growth. so if we can stay at 8% and have still high growth that is more sustainability, maybe now demand other people worried. so i don't like to see china in the growth even get to 9%. that is what we are concerned with. >> how likely is that? >> this around the growth is that basically domestic achievements demand, consumer demand is growing and if we got too much investment in the public infrastructure, it's very likely that china has high growth. >> i wonder what the impact you expect the slowdown in china means in the rest of the world. >> well, i think china is still a small part of the world.
but the chinese miracle is just an inspiration for all of us. china has never had a recession in its whole history. people here don't worry too much about overheating in china. >> no. if we think about recession in terms of potential growth, china's potential growth is 8%. we got a fix. >> you call that a reduction. >> you know, yesterday we had on a real estate developer and he said the urbanization of china is over at this point in beijing and in shanghai. not in the other cities. he said that we're going into a new phase. do you agree with that? in other words, the heavy lifting in terms of the building has been completed. >> well, there's a big city already too big.
shanghai, beijing, maybe even shenzhen is too big. but the urbanization of china means a huge number of small cities in the coastline become, you know, mid size or big cities. big cities, the definition of big city is over 500,000. right? and china now, a lot of the small towns have over, you know, 600,000 people. so that kind of urbanization will continue. you know, back to the inflation, overheating issue, remember, there's a history. recent history in the late '90s and early 2000. in china, growth around 7%. we thought deflation. so that is not a recession. and that is -- you know, it's difficult. so we don't want that to get too
low. >> we're not talking about deflation. i want to bring you in, robert, everybody is having a lot of comfort from six months of the housing data that we look like we've hit a bottom and things are improving. you're still saying we're not out of the woods there and you have to look at what's happening in japan. >> right. >> why? >> well, i looked at the data, six months of price increases don't mean anything. they don't predict the longer run. maybe they'll predict another six months. by the way, this is partly seasonal, too. so it's not dramatic yet. i don't want to be a bear. i'm not pessimistic. i'm just saying i don't think we should get excited. this is not likely to be another -- the beginning of another boom like we just saw. >> we don't want another boom. >> right. partly our regulators are not going to let it happen this time. so it's not going to happen. but, yeah, what we could see a year is 1% real growth or 2% maybe if we're lucky.
that's not exciting. >> robert, what's your sense on what we've seen so far from the earnings period. we've had news from apple, telling, ibm, not a lot of growth there. what's your sense so far as far as the fourth quarter for corporate earnings? >> well, i don't have inside knowledge of all these companies. i look at earnings. it's been very volatile since this crisis began. and earnings have historically been mean reverting. and i think that's that is something that is not understood well. price divided by ten-year average earnings which i've been advocating now with john campbell for 20 years now. and they're high. price earnings are high. and i think they're high relative to ten-year average earnings. i think the earnings are likely to be unsustainable. just the historic pattern. they tend to be wrote down. so i think the market is highly
priced. not extremely highly priced, but by historical standards, highly priced now. >> so you think the expectations are too high now? >> right. >> the stocks, you know, it's interesting, companies, are they going to retain their share of gdp? >> i'm sorry, what do you mean? >> well, they've taken quite a high chuck out of ge as far as the labor force or any other force. are they going to retain -- >> well, now, this is a big -- this is historic, big changes that we're talking about. and yeah, i think there's mean reverse there, too. but the people demand -- this is the people's republic of america. inequality is getting worse. we talked a lot about this in davos. and ultimately, it's going to correct back.
but i don't know when and it's getting worse in china, too, but you must be aware of that. >> do you think corporations are getting a fair shake in china? a lot of companies here are talking about being able to sell to the chinese people, getting a piece of that enormous conversation. do you think there's barriers to entry? >> well, there's barriers, but more and more the private sector res now in the market. and they are getting equity shares of the market. >> chinese do today, they're going to get the company back. >> they're there for just the -- they want to go in and get out, rather than being for the longer term. he said private equity has a better shot in china. >> thanks very much, indeed, for joining us. robert, thank you.
robert shiller, as well. we're going to take a short break. still to come, we've got the guest role keeps coming on here. we've got scott miner is going to join us. >> googenheim partners. >> yeah. is there cheap funding? it's going to fill the fumes in private equity. >> i wonder if they're going to be part of the gel deal. >> oh, good question. looking forward to that. and from kingfisher, castarama is coming up. plenty more to come. kelly. >> ross, maria, thank you very much. apple's first quarter profits were relatively flat but still beat forecasts. revenues fell shy of estimates. they lagged 50 million sales of iphones analysts had expected. iphone shipments are roughly in line with the forecasts for second quarter revenue of 41 to
43 billion. in a break with past tradition, apple will provide a range of margin and revenue estimates instead of a single number. and it was interesting, if you heard ross and maria talking to john earlier asking him about apple issuing a smaller or abandon guidance, he said, look, a lot of companies when they transition from fast growth to slower growth need to be more accurate in their forecasting. shares are down now about 7.5% in germany. they are recovering. but certainly a ways to go before they get back to 28% they've shed over the last six months. apple suppliers are feeling the effects. qualcomm down 1%. it's interesting to see the rest of the companies affected by this sector. u.s. futures were shrugging it off to some extent. the dow is looking to open higher by 7 points.
yesterday it did end higher by about 0.5%. the nasdaq, of course, the weakest link there with apple being such a big part of that index. but the s&p 500 is only pointed lower by a couple of points and, in that case, it did extend its winning streak yesterday to six in a row. it is within 13 points of hitting 600. quick check off european trade, broadly flat. the xetra dax is the weak link. it's interesting, ross. that's the one index, if anything that you would think would be spurred by the gains in the german pmi data we saw today. >> what am i doing? all right. that's where the markets are ahead of the u.s. open. still to come, "worldwide exchange," plenty more to come tr here in davos. we'll be joined by the presidency of coca-cola.
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welcome to this edition of "worldwide exchange." appearing losing shine. shares down 10% after hours after disappointing earnings. chinese factory activities speeds up to a two-twoer high in january while mixed signs from eurozone pmis in january. france b slows while germany continues to power ahead. coming up after this quick break, our dream team in davos,
maria and loss will be speaking with the ceo of coca-cola. you don't want to miss it. we'll be right back. ♪ [ male announcer ] how do you turn an entrepreneur's dream... ♪ into a scooter that talks to the cloud? ♪ or turn 30-million artifacts... ♪ into a high-tech masterpiece? ♪ whatever your business challenge, dell has the technology and services to help you solve it.
eurozone economy here in davos. with highlights are the reason again, unemployment numbers up 26%, a fresh record high. youth unemployment continuing to rise, as well. now if you're under age, under 25, more than one out of every two is without a job. so that is a sobering fact for those of us here in the snow. the eurozone crisis proving something of a drag and around the world. how is that fixing in with ceos optimism elsewhere is a review of what have somebody telling us in davos. >> first part of 2013 will be still challenging. you know, the secretary half will be better and we hope that 2014 will be much better. it is too early to say. i think the eu has taken action, the situation is much more stabilized, uncertainties have reduced. so i think we are on the right
path for further growth. >> it's going to be a reasonably good year. if you exclude europe, i would say it's going to be a good year for the industry, but when you include europe, it's going to be exceptionally good. we are looking at the car market with the construction of 8%. we are protecting 3% of construction for 2013. i don't think in europe we are still in the recovery mode. except europe, growth everywhere. >> you see the different twist or europe in particular dpifg more stability. it's about combining different disabilities to reboost growth. >> all right. the final quote there coming
back little by little, maria. >> yeah. a big diversified group of executives talking about the environment. joining us right now is the ceo of coca-cola, muhtar. it's great to see you. >> great to see you. >> what do you think? >> well, we continue to see opportunities everywhere in the world, the kind of opportunities are continuing to contract the code for growth. >> how is europe doing? >> europe is -- basically, everyone i know is saying that europe is not going to be getting worse than it was. and so it seems to have reached a kind of bottom. i share that sentiment. i think that all the european leaders and i've spent a lot of time with mario monti yesterday, moderated a session with him,
and i do believe that there is harshest optimism that things is going to improve. but everyone realizes, as they did not back this 2008 and 2009 that this is not going to be something that passes quickly, that the volatility we've been seeing in the world in terms of commodities, in terms of climate change, volatility in terms of currencies, the general macro picture is not going to improve overnight. and that we will have to continue to deal with these complexities. but the thing we have to find quicker and better solutions for is particularly youth unemployment. i think that has a chance of cracking the social fabric.
when you look at 40% unemployment levels for under 28-year-olds, that's something we can't continue to go forward with. for this year in davos, i feel actually excited that there is a new group called the young global shapers that have joined davos. and i spent an evening with them talking to all of them. i also moderated a session with them, with the international business council yesterday. and listening to those young courageous entrepreneurs, the way they look at the world, the way, what they're expecting from the world, what they're expecting from government, from business, is so encouraging because encouraging because what is -- what it shows is we've got so much to learn by listening to that group. >> i spoke to guy ryder earlier and he said when you look at the 50% plus unemployment levels like you've got in spain and greece for the youth levels, at some oint, that will lead to
enormous social distress, uprising, protests or whatever will happen. how far away do you think we are from that happening? >> i don't know how far away, but i know we can't continue going forward with those unemployment rates. it's in and out just greece and spain. unemployment for the youth is higher than the general unemployment level everywhere in the world. >> how do you fix it? >> engaging youth for -- and creating better golden triangles between business, government and civil society to proet provide clearer paths of success to the youth, to that generation. reforming, but not over the long-term. quicker our education system around the world, to provide a better balance between -- to address the gap of capability in the world. wa business needs today versus what the universities are providing. so it's a complicated matter, but we need to become more
action orientateed. >> how big a skills gap? we just had john chambers on. we talked about however the world changes on that event. how do we know what teaches people to stay for the jobs of tomorrow? >> well, the jobs of tomorrow, we might not know what they are. >> listening to the youth better in terms of what their expectations are. and i think part of -- part of the reason why today there has been such a big loss of trust by youth are because of these numbers coming out where you have such a large group of people that are unhappy because they down have any way to work and they don't have a job. we just can't have a world with two compartments, the haves and the have-nots. >> you make a fan tastic point. it is critical. you recently launched a new
advertising campaign talking about healthy diets, healthy living. it's quite interesting to -- coming from a company that has been built on sugary drinks. was this pressure that you wanted to do this as part of the conversation of healthy living? how did this come about? what kind of a reception are you getting? >> it is one of the reasons we did it is because we do want to be part of this conversation that's going on. but more importantly, it's part of our heritage. we've been always leading, providing a meaningful solutions to large societal problems ever since we started back in 1886. so it's been part of our heritage. we've always been associated with sports, with active, healthy lifestyles. that's why we're the earliest partners of the olympic games in the world, since 1928. and it's the same reason why we want to be part of this conversation is the same reason
we have decided to be water neutral by 2020. the same reason why we've wanted to empower women outside of the system by 2020. because we want to be a meaningful part of creating sustainable communities. and we know this is a societal problem. but when you look -- when you peel it away and look inside at obesity or weight gain, it's actually simple math. more calories in than calories spent. providing solutions to it is much more complicated than -- because it requires changing habits. and habits change difficult difficulty. but because we are a marketing business of brands, i feel rsonnsible and committed to this, that to mobilize the resources available to my company, to my bottling partners, with my bottling partners, to raise awareness, to
ensure that we provide the right choices. so we could -- we will continue to innovation to address calories in, through products like diet coke, coca-cola zero and many others and we will continue to raise awareness to address the other issue of how we can make it more fun to spend calories. >> good to have you on the program. >> thank you the. we'll take a short break and when we come back, scott miners will join us from guggenheim.
. welcome back to "worldwide exchange." i'm kelly evans in london. >> and i'm ross westgate in dae voes where the barclay's ceo is visibly transforming the bank after past mistakes and citi chief michael bulbert says he's begin trimming the business. china pmi is at a fresh two-year high. but a short while ago, the ceo told us his concern in the future will be about growth overheating. and apple loses its shiep. shares drop 10% after hours after the company reports disappointing third quarter results and ramps up demand for its product. unemployment in spain has risen to 26%. the worst figure since the end of the franco dictatorship.
let's take a look at markets. we saw apple shares pulling back in frankfurt this morning. the dow and the s&p are looking to open broadly flat. and we know the s&p extended its win streak yesterday to six straight as it crawls within 12 poz points of 1500. i mentioned apple was weighing on frankfurt trade. germany is underperforming. it is marginally higher this morning, perhaps helped by the fact that the german pmi data was stronger than expected. france was much weaker. we're seeing that divergence across the core. cac 40 up about 0.25%. the ibex up 0.2r5%. the ftse up 0.3%.
it has some of the biggest advancers in the market today with easyjets among others withernings. euro/dollar, 1.3331. the eurozone did report that the current account surplus was the biggest on record at a level of something like 13 billion euros. repayments are likely to keep the ecb and effectively in a tightening mode. those two things put upward pressure on the euro. dollar/yen, a big move today. 1.16%. now, that means the yen is weakening against the dollar again and it comes after japan's trade deficit in 2012 was a record high. it follows a couple of days of yen strength. the aussie/dollar shedding 0.5%. apple's first quarter profits were relatively flat. it can still be forecast by looking at the bond wall there.
to look at that corporate story which is, of course, driving much of the trade action we're seeing this morning. apple's fourth quarter profits relatively flat. they did beat forecasts. revenues were shy of estimates. it was a record, but it lags to the 50 million figure analysts had i'd. shares in china doubled. ipads are abruftly in line with forecasts. in a break with ra decision, apple will now provide a range of revenue and margin estimates instead of a single number. shares were down 10%. down 7 .6% currently. scandisk is down 33%. qualcomm, some of the others more in a range of 1% to 2%.
jon fortt sends us this report. a rough report for apple after a more than 10% drop. here is the reason why. wall street wanted revenue from apple, a $54.73 billion. apple turned into 54.5. not too far off. they wanted eps of $13.44. apple turned into $13.81. but guidance, he was hoping that the march quarter would come in above $45 billion. apple guided to $41 billion to $43 billion. here is the rub. apple said you know how in the past we would give conservative guidance, sandbag a number we knew we could beat? we're not doing that any more. now the range is something we believe we feel we will fall in. but $3 billion under what wall street wanted to hear and
there's not much solace. we take a look at the quarter and see exactly how -- >> well, jon fortt trying to give us the latest take on what was happening with apple. apologies for that. we're going to take a quick and sort everything out. we'll have plenty more to come out of davos. next we'll hear what theeo of citigroup had to say. ♪
all right. we continue the program here in davos, maria and i. for the british, talk about what david cameron has been saying. we've got essentially five years -- this is david cameron wins the next election before we hit the referendum, it will make businesses consider their investment opportunities. is that fair or not? >> i think the overlying reality is the uncertainty of our potential future in europe comes from the democratic position in the uk and that's regardless is a fact today. people are uncertain about what the shape of the club that we now belong to? and is it the same one that we joined? but i think the democratic deficit or this oh a sigz of people is the underlying issue.
so doing something about that by saying, let's get clear the shape of the eu we do want. what is the shape of that? that has to be about the single market, about a more competitive europe. and that is something that i think they can take back and say that's a good thing for britain. and so i think you have to move towards it because the uncertainty is there today and those businesses will reflect that, anyway. i don't think illustrate necessarily changes. >> have you seen any changes in terms of the economic landscape? >> yeah. i think what we're seeing is probably a softening in some of the major french and consumer markets. >> and germany is more positive
than the french market, but it's slowed down a bit. by contrast, we've seen good gdp numbers. in fact, i think we've seen a six-month softening in the eurozone which i think is an important factor there that the british politicians need to reflect. the french market is very much the uncertainty around tax success government. i think that will wash through. >> if we now believe in that, that impacted that small percentage of the population. >> from our point of view, the key issue was the uncertainty of the consumers and also the companies. one of the welcomes of the french government now gives us payroll tax credit which we were very positive about. unfortunately we don't know the exact amount. we're waiting for the details. in france at the moment, there is a sense of, look, can we get
clear? >> it's amazing. it seems to me that this is the theme around the world. sernlt it is the theme in the united states right now. you're seeing corporations sit on their cash and wait for policymakers to come up with clarity so they can move forward. what is it going to take to actually move forward? what is it going to take, for example, to get france and poland to see consumers and moving once again? >> well, i think there are some differences country by country. france, it's a specific issue which is the tax regime needs to be clear. i think the underlying fundamentals for french companies is not that bad. in poland and the uk, i think you have more of a consumer waiting to lead, but sometimes will get better. i think lending finance plus infrastructure measures are the two that government needs to take. what more could we do to get the
consumer back in a more positive frame of mind? >> you raise a very good point. george osborne and david cameron is both flying in today to davos. we hope to speak to them. we're going to get a negative picture of gdp tomorrow. that will put even more pressure on the chancellor. what does he need to do even more of? >> one of the things is to deliver some of the things that have been announced, for example, the lending scheme.
maybe there are some things now that we should put the button on really just to start the process again. and it's not blaming the deficit. we don't want that. but it is constructive action in a couple key areas. >> we can't keep doing austerity, austerity, austerity and not see an impact. >> thank you so much. >> kelly. >> ross and maria, thank you so much for that. seeing a slowdown broadly in europe, france, even in poland there. getting the on-the-ground take of what's going on. apple losing its shine. shares down 10% after hours on disappointing earnings. china p mi is up to a two-year high in january. france is slowing while germany continues to power ahead. ♪ [ male announcer ] how do you make 70,000 trades a second...
overmany discounts to thine customers! [old english accent] safe driver, multi-car, paid in full -- a most fulsome bounty indeed, lord jamie. thou cometh and we thy saveth! what are you doing? we doth offer so many discounts, we have some to spare. oh, you have any of those homeowners discounts? here we go. thank you. he took my shield, my lady. these are troubling times in the kingdom. more discounts than we knoweth what to do with. now that's progressive.
all right. we continue our coverage here in davos. risk taking, the bonus culture, as well, maria has been speaking to the ceo of citi and asking for his priorities for a more streamlined business. >> you can't cut yourself to where you want to be. you have to be balanced in that. and i want our business managers to be focused on the balance between expense and revenue. and so rather than having these one off or annual events with announcing big things, i want it to be part of the way we operate the business and we're out here working on the metrics that we're announcing. operating efficiency is going to be one of them and we want it to be more vau. >> how sdhit firm, then, break up in terms of those proficiencies? tell us the breakdown in the bank in terms of how you see it
in the coming years the. >> yes. sure. we've simplified the company a lot. we've become smaller and focused. we've focused on our consumer franchise, which we operate in 40 countries around the world and our constitutional franchise, a combination of our contraction services interest, markets, banking as well as our private bank businesses and those are the businesses we're in. >> in terms of those two businesses coinvieding side by side, there's a lot of debate on whether or not we're going to see forced break-ups. what's your sense of how the industry changes? will you be able to keep these two businesses together given the fact that you've got the pressure from the regulators in europe, regulators in the u.s., forget basel, but we'll get to the capital and basel and look at quid quiddity in a moment.
we think the two fit together well. when we operate, we look at an overlap of the geographical footprints. a lot of the thing we do, those things come together well. and that was, i think, made apparent in my announcement of the coke presidents with jamie rung our institutional business. >> just a ahead from the ceo of barclay's, anthony jengin webs talk about how the bank has to focus on health ahead of their transformation in february. and he also makes it about the mistake s they made in the past. >> the industry and barclay's got it wrong on occasion. i think we were too aggressive, we were too short-term focused
and we were too short-term serving. >> all right. so those are the bank interviews earlier. plenty of that with mobile, if you've noticed, overnight. steve, you're with us, as well. and i didn't know you were going to do this. you've been getting in on the technology research. >> sure. i've always been what i consider to be a professional user. i'm not an expert, but i -- >> a user of -- >> of tech. technology. i filled that in. maybe the viewers at home thought what comes after that. i got a demonstration last night as i've heard others have of the new blackberry 10. i'm not giving you a recommendation on this thing. i saw the keyboard that was demonstrated by a high level blackberry executive and then i used it myself. it was very, very good. i have been opposed to use the
virtual keyboard. i've tried the iphone. i didn't like it very much. this was very, very good, very usable, intuitive, and the browser was very, very fast. >> i agree. >> you were given a demo, but you came at it in two bits, right? >> i got a demo and what i loved about it was the keyboard. what i heard last night is yes, the blackberry 10 is coming out at the end of the month, but soon after, we'll have a blackberry 11 but it is an added keyboard. because why do you use the blackberry? you can't a keyboard. so the first version will be like the keyboard. it was very impressive. i loved it. >> i think this is an extraordinary story. i think we've seen over the years with technology, very few companies, if any, ever get a second chance. it looks like blackberry may, in
fact, get a second chance. there are enough loyal users between me and maria and a bunch of other folks who have held out. i have to say, when i brought my blackberry out at a party, i was a social polite. they say, liesman, join the 21st century. but i stuck with it. >> and apple. >> apple is probably is other example which is interesting because they're obviously compete, apple. >> rim is making an enormous push. there's a lot of advertising. the way you walk around that, you can see their stuff. besides -- >> you mean like normty. >> normality. the best quote i heard was martin wolf and i asked him, he's allowed me to quote him. he declared the end of the six-year financial panic. so i thought that was big. now, i came here, as you know, the day i got here, i wrote this
piece about precarious civilians. not that the financial world is not smouldering, but greece was not aflame, the united states had just done the debt ceiling. i said you know what? because the ecb finally started acting like the federal reserve, the panic is now over. didn't say the crisis is over, but the panic is over. >> you said carry stability. you talked about tend of financial panic. >> others are saying cautious optimism. >> right. but there's two separations. once we get done dealing with the panic. we'll be farced then we're not part of a business cycle. ben there, sdun this. >> but you've got to get ceiling debate in the u.s.
you've got the italian elections. so we will see. >> the perception over here is that the extreme part of the republican party has backed off on this issue of the debt ceiling. >> well, sure, they're extending it. >> that's the perception there. >> steve, there you go. jon fortt better watch out, that's all i'm saying. >> he's covering the economy. we can swap for a while. >> that's not a badi. what do you think, kelly? >> receive, i have the blackberry 11 for the keyboard, right? >> no. you'll elect the virtual keyboard. >> we'll have plenty more from davos together. what are you doing?
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good morning, everybody. i'm becky quick along with joe kernen. andrew ross sorkin will be joining us from davos. >> good morning. >> apple popping out quarterly results. it is still not enough for investors who are punishing the stock today. the company earned $13.81 a share. that beat the street, which was expecting $13.47. but revenue came in lighter than expected at 54.51 billion versus estimates of 54.73. >> barely. >> barely came in lighter. >> no beat. >> no upside surprise. maybe more guidance than they gave talking about how from now on this guidance may -- in the past, they've been conservative. now they'll be giving a range. but listen to some of these other key stats that have been coming under scrutiny from wall street. apple sold 47.8 million iphones. it was a huge record, way more
than they've sold in the past. but then again, some of the street wanted to see a number closer to 50 million or more. ipad sales were up from 15.4 million a year ago, but still a little bit of a disappointment for some of the street. and here is another big statistic for you. apple has $137 billion in cash. as we mentioned, the stock has been taking a hit. it's down as much as 10% in late trading. you see this morning, down 8.37%. by the way, that stock is down 30% from its all-time high of $705. trading this morning at $470. but even with the huge declines, this is still the largest market cap company in the world. i think it's about $20 billion more than exxon at this point. we're going to be following the stock all morning long and we'll talk to an analyst in just a few minutes. >> yesterday, i wanted to know which way, what it's going to do one way or the other. and it was going to be hard to
hit, obviously. >> people wonder if the growth -- >> grunlack nailed it after it came out. we've said this more than a few times, it was overloved. who is left to buy the stock at 700 when everybody is already in? he says it could go to 425 and, you know, if it breaks from there, it could actually go to 300. but after the sell-off today, it's still going to be the most valuable company in the world. >> it was an apple christmas at our households. we got ipads all the way around. we got mac books. we were the last ones in. >> and, you know, i've seen on -- you know, we have shows on the network where they try to call things on a daily basis. and it went down below 4 hurn and i remember it snapped back one day and i saw people